-
- 08 Jul
Now is the time to play fuel margin catch-up
It has been a tough first half of the year as far as retail fuel margins go. According to the weekly OPIS margin reports, the year to date average currently stands at $0.165 per gallon compared to $0.180 this time last year. Alimentation Couche-Tard, whose outlets include Mac’s and Circle K, just reported in their financial earnings their gross fuel margin in the United States fell more than 23% this quarter to $0.1485 per gallon from $0.193 per gallon same quarter last year. While same-store fuel volumes increased 2.8% at Couche-Tard, that wasn’t enough to prevent the company from missing analysts’ expectations.
But according to Brian Milne of Schneider Electric, now that ISIS (the extremist militants, not the mobile wallet company) has been contained in Iraq, and Libya is expected to increase their output from roughly 200,000 bpd to 500,000 bpd in the near term, supply disruptions are perceived as being much less likely. That explains why global oil prices are down from early June and should continue on that trend. The Brent crude contract is already down $5 bbl from its June high.
That means now is the opportunity to gain margins the fuel retailing industry lost while the cost of oil was climbing. Keep careful watch on the competition, but don’t be too quick to drop your retail fuel prices – use retail fuel pricing software like PriceAdvantage to protect your margins.
Comments are closed.
